1.This Act may be cited as the
Clean, Renewable Jet Fuel
Act
.
2.Loans for
qualifying jet fuel production projects
(a)In
this section:
(1)The term direct loan has the meaning given the
term in section 502(1) of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a(1)).
(2)Lifecycle
greenhouse gas emissionsThe
term lifecycle greenhouse gas emissions means an amount of
emissions determined though the same methodology used by the Environmental
Protection Agency to evaluate lifecycle greenhouse gas emissions under section
211(o) of the Clean Air Act (42 U.S.C. 7545).
(3)The term market
price means the weekly average closing price of the front month contract
for West Texas Intermediate futures on the New York Mercantile Exchange.
(4)Qualifying jet
fuel projectThe term
qualifying jet fuel project means a project located in the United
States that produces at least 25,000,000 gallons per year of liquid aviation
turbine fuel or blending component that—
(A)as produced has at
least 50 percent less lifecycle greenhouse gas emissions than petroleum;
(B)is produced from
renewable biomass, as defined in section 211(o)(1)(I) of the Clean Air Act (42
U.S.C. 7545(o)(1)(I)); and
(C)meets, or can be
blended with other components to produce a fuel that meets, an American Society
of Testing and Materials (ASTM) standard for aviation turbine fuels.
(5)The term sales means the
volume of jet fuel described in paragraph (4) that has been sold to the open
market after being produced from a project, as specified in an agreement
entered into under subsection (b).
(6)The
term Secretary means the Secretary of Agriculture.
(7)The term strike
price means a specified price below which the United States shall make
payments in the form of a loan to the owner or operator of a qualified jet fuel
project and above which the owner or operator of a qualified jet fuel project
shall repay the loan under the terms specified by an agreement entered into
under subsection (b).
(b)
(1)The Secretary shall enter into a standby loan agreement
under this section with the owners or operators of not more than 10 qualifying
jet fuel projects. Such an agreement shall—
(A)provide that the
Secretary shall make a direct loan for the project;
(B)define the primary term of the agreement,
which shall not exceed the lesser of 10 years or 75 percent of the projected
useful life of the project (as determined by the Secretary); and
(C)define the full term of the agreement,
which shall not exceed the lesser of 20 years or 90 percent of the project
useful life of the project (as determined by the Secretary).
(2)The strike price
shall be determined by an auction process. The Secretary shall conduct 3
auctions over a period of 2 years. The 3 auctions shall be structured in order
to ensure, to the maximum extent possible, that number of projects awarded
under each auction is the same.
(3)A loan made
under this section shall be disbursed during the primary term of the loan
agreement whenever the market price falls below the strike price. The amount of
such disbursement shall be equal to the excess of the strike price over the
market price in each given week, times the sales of the project for the
following week (but not more than a total level of disbursements specified in
the agreement).
(4)The Secretary shall establish terms and conditions,
including interest rates and amortization schedules, for the repayment of such
loan within the full term of the loan agreement, subject to the following
limitations:
(A)In any calendar quarter during the primary
term of the agreement the loan recipient may elect to defer some or all of its
repayment obligations due in that quarter if any new loan disbursements have
been made in that quarter. Any unpaid obligations will continue to accrue
interest.
(B)If in any calendar
quarter during the primary term of the agreement the market price is greater
than the strike price, the loan recipient shall meet its scheduled repayment
obligation plus deferred repayment obligations, but shall not be required to
pay in that quarter an amount that is more than the excess of the market price
over the strike price, times the output of the project.
(C)Unless the
Secretary determines otherwise, at the end of the primary term of the
agreement, the cumulative amount of any remaining repayment obligations,
together with accrued interest, shall be amortized (with interest) over the
remainder of the full term of the agreement.
(c)Compliance with
Federal Credit Reform ActLoans under this section shall be
subject to the requirements of the Federal Credit Reform Act of 1990.